Sensex falls for fifth day, down 113 points before RBI review

The benchmark Sensex fell for the fifth day in a row on Monday, declining 113 points in a late sell-off as investors turned cautious ahead of the RBI policy review meeting.

State Bank of India, the country's largest lender, HDFC Bank and ICICI Bank were among the shares that dragged the Sensex lower. The fall would have been more pronounced but for gains in HDFC, Larsen & Toubro and Reliance Industries shares.

Sectors that fell were FMCG, realty, metals and banks.

Cigarette major ITC tumbled 3.63% and was the top loser on the Sensex after CLSA cut its earnings per share estimates by around 2%.

The 30-share S&P BSE Sensex opened on a positive note and touched a high of 20,771.38 before profit booking set in. The index closed down 113.24 points, or 0.55%, at 20,570.28. It has lost 324 points in the past five sessions.

The 50-share CNX Nifty on the National Stock Exchange dropped 43.80 points, or 0.71%, to end at 6,101.10. The SX40 index of the MCX Stock Exchange closed almost 60 points down at 12,249.69.

"Nifty opened on a flat note and witnessed selling pressure for rest of the trading day. Intraday volatility was seen ahead of the RBI's monetary meet tomorrow and also as FO expiry day is approaching this week," said Nidhi Saraswat, Senior Research Analyst at Bonanza Portfolio Ltd. "Further, profit-booking aggravated the selling sentiment."

The Reserve Bank of India may increase a key interest rate to 7.75% from 7.5% in its Second Quarter Review of Monetary Policy on Tuesday to contain rising prices, while also announcing steps to ease liquidity, according to some banks.

In September, RBI Governor Raghuram Rajan surprised the markets by increasing the repo rate by 0.25% in a bid to check inflation.

The market may also remain volatile as investors in the futures and options segment decide whether to roll over their positions on the expiry of equity derivative contracts on Thursday, a broker said.